Auto Enrol Pension Services
Auto Enrol Pension Services
Who is enrolled?
Auto enrolment applies to all employees in the UK but not all of them have to be enrolled automatically. You do not need to enrol an employee automatically if they:
- Are under the age of 22 or over the State Pension age
- Earn less than the threshold, currently £10,000 per year
- Work outside of the UK
- Work for a one person company
- Are already enrolled in a qualifying pension scheme
Employees need to be treated differently depending on their employee category. An employer may fall into one of three categories; eligible jobholders, non-eligible jobholders, and entitled workers.
Eligible jobholders are workers who:
- Work, or ordinarily work, in the UK,
- Are aged between 22 and State pension age,
- Earn above the earnings threshold (currently £10,000).
Automatic enrolment makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also make contributions into the scheme. Workers who do not want to join the scheme may choose to opt out for a three-year period.
Non-eligible jobholders are workers who:
- Work, or ordinarily work, in the UK,
- Are aged at least 16 and under 75,
- Earn between the lower level of earnings and the earnings threshold (currently £5,772 – £10,000).
or
- Work, or ordinarily work, in the UK,
- Earn above the earnings threshold (currently £10,000) and are under 22,
- Earn above the lower level of earnings (currently £5,772) and are over State pension age.
Non-eligible jobholders will not be automatically enrolled into their employer’s pension scheme. However, they may ask to be enrolled. If this is the case, the employer must also contribute to the pension scheme
Entitled workers are those who:
- Work, or ordinarily work, in the UK,
- Are aged at least 16 and under 75,
- Earn the lower level of earnings or less (currently £5,772).
Entitled workers are not automatically enrolled. They may ask to join the scheme, which is different to being enrolled. The employer is not required by law (but may if they wish) to make employer contributions to the scheme.
It is vital to note that employers do not have to set up a pension scheme if there are no eligible jobholders. However, if an employee decides to opt into or join a pension scheme the employer must then set one up.
Opting out
Deductions & Contributions
As an employer, your first ongoing auto enrolment responsibility is to make employee deductions and employer contributions. The contribution rates are agreed when setting up your pension scheme, which must be at or above the minimum amount set by law. The minimum contribution, is currently 3% for employers and 5% for employees.
To find out more about how to comply get in touch with one of our team.
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